Citadel Securities LLC has launched a legal battle to contest a recent U.S. Securities and Exchange Commission (SEC) order, filing a petition in the Eleventh Circuit. The order mandates Citadel Securities and other brokerage firms to financially support the development of the consolidated audit trail (CAT), a vital market surveillance tool.
Citadel Securities’ stance is supported by the American Securities Association (ASA), a prominent trade group. The ASA asserted its position on Tuesday, emphasizing that the lawsuit was initiated to address widespread concerns raised by investors. These concerns encompass transparency, governance, costs, and data privacy.
At the heart of this legal challenge lies the SEC’s decision on September 6 to implement a new funding model for the ongoing construction of CAT. The consolidated audit trail serves as a centralized database for market surveillance, designed to facilitate swift access to market data, thereby enabling the SEC to effectively fulfill its regulatory obligations.
